The long-term impact of our financial decisions

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It is becoming increasingly usual for the family courts to seek a clean break agreement whereby married couples are no longer financially tied after their divorce (avoiding spousal maintenance payments if possible). There are, however, circumstances whereby this is not viable.

The case

Mills v Mills [2018] has tested the law’s understanding of what is to happen when financial circumstances change.

At the time of separation, Maria Mills received a lump sum of £230,000 to purchase a mortgage-free property. In addition, she was to receive maintenance payments of £13,200 per year from former husband, Graham Mills. Mrs Mills went on to purchase several investment properties with mortgages, and spent, rather than reinvested, any profit. Subsequently, Mrs Mills sold her last property and needed to rent herself a home.Mrs Mills claimed that her maintenance was not sufficient to fund her rent and made a court application to increase the funds she received from her former husband.

Mr Mills made his own application to reduce the level of maintenance he was paying.

The ruling

The case went to the Supreme Court, and the judge found that Mrs Mills ‘had committed herself to borrowings which were too high’ and therefore her needs ‘had been augmented by reason of the choices which she had made.’ The judge maintained the existing agreement, overruling a Court of Appeal decision.The maintenance payments remained the same.

The implications

Any financial agreement or order should, ideally, display longevity to prevent the need for revisiting an outcome.There are, however, occasions when a maintenance order may need to be reconsidered and the court will often assess the circumstances as they are at that point in time.

The outcome of the Mills v Mills [2018] case is clear – it is unacceptable to have a second bite of the cherry simply because of self-created circumstances resulting in a former spouse requiring more. Mrs Mills was awarded capital to purchase a property – the fact she now needed to rent was of her own doing, which the court agreed.

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